Source: Morningstar DBRS
DBRS Ratings Limited (Morningstar DBRS) confirmed its credit ratings on Australia and New Zealand Banking Group Limited (ANZ or the Group), including the Long-Term Issuer Rating at AA and the Short-Term Issuer Rating at R-1 (high). The trend on all credit ratings is Stable. The Group’s Intrinsic Assessment (IA) is aa (low) and the Support Assessment is SA2, which reflects the generally supportive regulatory framework and Morningstar DBRS’ expectation of timely systemic support given ANZ’s importance to the financial system in Australia. This results in a one-notch uplift to the Issuer Rating from the IA. See a full list of credit ratings at the end of this press release.
KEY CREDIT RATING CONSIDERATIONS
The confirmation of the ratings reflects ANZ’s strong franchise, supported by meaningful market shares in lending and deposits across its core markets of Australia and New Zealand. The credit ratings are underpinned by the Group’s resilient earnings generation, sound asset quality, sound funding and liquidity profile supported by a stable customer deposit base, and its robust capital position.
The Stable trends reflect Morningstar DBRS’ view that the financial impact of the operational risk penalty has been manageable given ANZ’s strong revenue momentum and robust capital position. The effective remediation of nonfinancial risks remains an important credit rating consideration. Accordingly, Morningstar DBRS will continue to closely monitor the Group’s progress in strengthening its risk management framework and risk culture, with particular focus on any adverse effects on the franchise, business growth, or earnings profile.
The Group’s IA of aa (low) is at the midpoint of the IA Range to reflect that ANZ’s credit fundamentals and performance are commensurate with those of similarly rated peers.
CREDIT RATING DRIVERS
Morningstar DBRS would upgrade the credit ratings if the Group strengthened its profitability levels while maintaining robust asset quality and solid capitalisation levels. In addition, ANZ would need to demonstrate a sustained track record of effective nonfinancial risk management and governance.
Morningstar DBRS would downgrade ANZ’s credit ratings if there were a prolonged material deterioration in profitability and asset quality or a material impact to the franchise or capitalisation because of repeated risk management shortcomings. Furthermore, Morningstar DBRS would downgrade the long-term credit ratings if, in its view, the likelihood of timely systemic support declined.
CREDIT RATING RATIONALE
Franchise Combined Building Block Assessment: Very Strong/Strong With total assets of AUD 1,314 billion at the end of March 2026 (end of H1 2026), ANZ is a leading Australian bank with sound market shares in home loans of 13.2% in Australia and 29.8% in New Zealand. Globally, ANZ’s footprint extends to 29 markets, of which 13 are in Asia. The Group is leader in the institutional banking in Australia and New Zealand.
Earnings Combined Building Block Assessment: Good
Morningstar DBRS views ANZ’s earnings generation as sound and resilient, supported by its leading banking franchise, good cost control, and low loan loss provisions. On a statutory basis, the Group reported net profit attributable to shareholders of AUD 3,650 million in H1 2026, broadly stable year over year (YOY) from AUD 3,642 million in H1 2025. This reflected stable net interest income, and lower other operating income offset by lower operating expenses. In H1 2026, profit before credit impairment and income tax increased 2% YOY. ANZ reported a statutory return on average equity of 10.3% in H1 2026 compared with 10.4% in H1 2025, and 9.7% in H1 2024. ANZ is in the process of restructuring; however, its cost-to-income ratio as calculated by Morningstar DBRS decreased to 51% in H1 2026, compared with 52% in H1 2025. On a cash-profit basis (excluding one-off items), the Group’s cash profit was AUD 3,780 million in H1 2026 up 6% YOY from AUD 3,568 million in H1 2025.
Credit impairment charges increased to AUD 274 million in H1 2026, compared with AUD 145 million in H1 2025. The increase was largely driven by higher impairments associated with the Middle East crisis, which triggered a 2.5% increase to severe downside scenario, scenario weights skewed 52.5% to the downside scenarios, and a small increase in overlays to reflect risk associated with the forward looking macro-economic environment. Although the cost of risk (as calculated by Morningstar DBRS) increased to 7 basis points (bps) in H1 2026 from a very low 4 bps in H1 2025, it remains below ANZ’s long-run cost of risk of 11 bps and continues to compare favourably with international peers.
Risk Combined Building Block Assessment: Strong/Good
ANZ has a generally conservative credit risk profile and sound asset quality with low levels of impaired loans despite the higher interest rate environment. However, addressing risk shortcomings remains an important challenge for ANZ, which will remain a key focus for management until the remedial plan is fully implemented and the Australian Prudential Regulation Authority (APRA) is satisfied with the Group’s progress in improving its risk management practices. The Group has sound asset quality with low levels of impaired loans. Stage 3 loans slightly decreased to AUD 7.8 billion at the end of H1 2026, and the Stage 3 loan ratio was 0.98% at the end of H1 2026, compared with 1.00% at YE2025. Stage 2 loans (i.e., loans that are classified as having experienced a significant increase in credit risk but are not impaired) represented 9.4% of gross loans at the end of H1 2026 below 9.8% of total gross loans at the end of H1 2025 but above 8.1% at YE2025.
Funding and Liquidity Combined Building Block Assessment: Strong/Good
ANZ’s funding and liquidity position is sound, largely underpinned by a sound customer deposit base in its home markets of Australia and New Zealand. The Group’s customer deposits (including certificates of deposits) grew 1.7% YOY. ANZ’s wholesale funding is well diversified by investor, maturity, instrument, and currency. At the end of H1 2026, refinancing needs were manageable with around AUD 17 billion in H2 2026 as part of the funding target of AUD 30 billion to AUD 35 billion of wholesale issuance scheduled for F2026. This compares with AUD 16 billion issued in H1 2026.
ANZ’s liquidity position is sound, and the Group’s average high-quality liquid assets were AUD 286.9 billion at the end of H1 2026, broadly unchanged since the end of H1 2025. Total liquid assets were AUD 308.8 billion at the end of H1 2026, up from AUD 306.0 billion at the end of H1 2025, and representing about 24% of total Group’s assets. At the end of H1 2026, the Group’s average liquidity coverage ratio (LCR) was 132%, with the LCR remaining above the regulatory minimum thresholds throughout the period, and its net stable funding ratio was 115%.
Capitalisation Combined Building Block Assessment: Strong
ANZ has a strong capital position underpinned by its strong earnings generation capacity and sound access to capital markets.
ANZ’s APRA CET1 ratio increased to 12.4% at the end of H1 2026 from 12.0% at YE2025, largely reflecting the Group’s earnings generation and comparing well with the APRA minimum requirement of 10.25%. ANZ’s leverage ratio, calculated on an APRA basis as Tier 1 capital as a percentage of total exposure, was 4.5% at the end of H1 2026, slightly up from 4.4% at the end of H1 2025 and amply above the minimum requirement of 3.5%. On an internationally comparable basis, the leverage ratio was 4.9% at H1 2025, while the CET1 ratio was 18.4% at the end of H1 2026, compared with 17.0% at the end of H1 2025.
Further details on the Scorecard Indicators and Building Block Assessments can be found at https://dbrs.morningstar.com/research/489949
ENVIRONMENTAL, SOCIAL, AND GOVERNANCE CONSIDERATIONS
Governance (G) Factors
The Corporate Governance subfactor is relevant to ANZ’s credit ratings but does not affect the overall credit ratings or trends assigned to the Group. This is reflected in the Risk grid building block. While ANZ made progress in addressing the governance and operational risk issues identified by APRA and the Royal Commission in 2018 and 2019, more recent developments have raised further concerns. In July 2024, ANZ disclosed regulatory investigations into potential trading and conduct issues, including data reporting failures, misreporting of 2023 bond transactions, and risk management deficiencies in its Sydney dealing room. In August 2024, APRA imposed an additional AUD 250 million operational risk capital add-on for nonfinancial risk management weaknesses, increasing the total capital add-on to AUD 750 million from AUD 500 million. In April 2025, ANZ entered into a court enforceable undertaking with APRA for matters relating to nonfinancial risk management practices and risk culture across the Group, which included an additional operational risk capital overlay of AUD 250 million (equivalent to 5 bps of CET1 capital), raising total add-on to AUD 1 billion. This followed the emergence of issues in ANZ’s Global Markets business. As such, APRA also required an independent review of ANZ’s Global Markets business’ governance and risk framework and the implementation of remediation measures. The capital add-on will remain in place until APRA is satisfied that the identified deficiencies have been adequately addressed.
There were no Environmental or Social factors that had a significant or relevant effect on the credit analysis.
A description of how Morningstar DBRS considers ESG factors within the Morningstar DBRS analytical framework can be found in the Morningstar DBRS Criteria: Approach to Environmental, Social, and Governance Factors in Credit Ratings (20 July 2026), https://dbrs.morningstar.com/research/485522
Notes:
All figures are in Australian dollars unless otherwise noted.